expenses growth was slightly higher than revenue growth. part of the revenue growth was an increase in membership of approximately 1%. that took place in 2019-2020, but due to the expense needs brought by the pandemic for the kaiser permanente enterprise organization, the operating income was less in 2020 than it was in 2019, so all told, this leads to kaiser forecasting typical increases in revenue. in other words, the insured premium rates for their customers from the 2021 to 2022 plan year. and so we built in all of the various elements into the rate cards, including the -- basic vision plan premiums and the sustainability fee. so when you look at the comparison of contributions for members at the top of the page, the employer contributions and the total monthly rate, all

growth by 4.9%, this is the early retirees in 93, 93, 83 strategy active employees and then this is the 100, 96, 83 strategy for active employees. and these are the resulting rate cards driven by the premiums quoted by kaiser as well as the vision basic and the sustainability fee expenses. with them the member contributions flowing through based on m.o.u.s for active employees and city charter formulas for early retirees. so with that, staff recommends the health service board approve a 4.96% insured plan premium increase from 2021-2022 for active employees and early retirees in california and -- in kaiser based on the fully insured plan rates proposed by kaiser for the 2022 plan year and the resulting 2022 plan year rate cards contained in this presentation. president?

>> okay, thank you very much, again, for a very detailed but succinct presentation. so i'd like to open this up for questions, comments from the board members. >> about consistency, we have very little change in membership year over year in our kaiser members throughout the system, and i hope that more recognition of that is given weight in the actuarial practice as you review the claims process. i appreciate your diligence on that point today. thank you. >> we have looked at that, absolutely.

>> can i just clarify exactly the point you're making, commissioner scott? because it seems to me that a lot of health care costs have to do with changes in providers, changes from one system to another, and this persistence should, in fact, work in the -- to the benefit of the health service system in terms of costs. >> yes. >> when i look at the increase in revenues between 2019 and 2020, we increased our contribution as a system but over 5%, yet the revenues only increased by 3.7%. i'm just sort of wondering if there's comparison to how we -- our rate increases as the health service system for our entities compare to other contractors with kaiser. are we sharing equally in these

increases from year to year? and if so -- if we're not, how come, given the comment that commissioner scott just made. >> yeah, what i'd like to do is ask a kaiser representative to speak to the approach that you have enterprise-wide to setting premiums, and then in particular, you know, how that leads to the underwriter approach for sfhss. >> hi, good afternoon. lorena sea defensive zone crist. a couple of things that i wanted to go ahead and comment on, the discussion about the membership changes and what we look at there, and mike is correct. we all look at it very closely. we work very closely with mike

and aeon in discussing some of those changes, and what we do see over time is that we have seen the population age. we also look at membership mixes as far as the average age, the gender profile, as well as the membership mix as far as single family mix as well, and that can also change really the overall risk population that we're looking at. the question about what we use as far as applying consistency, we have a methodology that we use which for groups the size of hss we will look at their utilization and apply a number of rating factors that are based

on the overall health plan demographics, so the trends, the pooling levels, the retention, all of those factors are applied consistently across all of our different customers, and so that results in our overall exempted expenses and our revenue targets to meet those expenses, and so what we look at is the rate setting component that mike talked a bit earlier and how we are looking at the overall program that we have and the expected cost of expenses for 2022, and then we determine what that resulting commercial average commercial rate increase will need to be to meet those projected expenses. and we have been able to consistently over the past few

years have -- or between 3 to 6% really on average closer to the 4 to 5%, but we've had a very consistent range of rate increases i would say even if you look back five, six, seven years, from 3 to 6%, and we have seen hss come within those ranges almost every year. >> thank you. i guess just to follow up the question, just to make sure i'm clear that i understand there are lots of issues and you have a huge database on which to look at underwriting issues. so if you had to maybe list the top three, it looks to me like maybe san francisco or hss, i should say, not san francisco, is at some disadvantage compared to some of your other groups of contracting. do we always fall in the higher range of increases? and if so, is that because of

our aging employees and demographics, other chronic conditions? does it have to do with local salaries, facility costs? i mean, can you give us some sense about -- maybe i'm wrong. maybe san francisco -- maybe hss does not fall towards the higher end of the increases year in and year out. can you tell us where we do fall, if it doesn't fall higher? >> do you want me to take that or do you want to -- >> yeah, i'll start, and then maybe if you could add to it. so actually with this renewal, five of the past six years the rate increase for sfhss on the kaiser plan has been approximately 5%. there was one year, 2019 i believe, i'd have to go back and check. there was one year of a slight rate decrease of 0.3%, but

otherwise the other five years of the most recent six, including the 2022 renewal, have come in generally around 5% increase. >> yes, and i would add to that, when we look at the overall average hss, their average increase over time has been very close to our health plan average increases. we have seen, as mike described, a few times where it's been a bit higher, and so that overall average has been creeping up a bit compared to what we see for our overall commercial book of business, and that really is, as you were just describing, is around the membership mix, and so we do see that the population has been aging, and so when we look at new members that joined the plan, if they are older or

if they have other, you know, health conditions that are contributing to somewhat higher utilization, then that will also provide some of that upward pressure to an increase that's slightly higher than what we see in our average. >> please go right ahead. >> i was going to say that as we're looking at our demographic studies and our risk factor studies -- we didn't do the risk factor last month. those, particularly the last [indiscernible] aging of our population, i am not entirely sure that that is as much of a factor as you might find in the rest of your book of business, but i'll take you at your word at this point.

just my recollection doesn't seem to square exactly with that last comment. >> commissioner hao, did you have a question or comment? >> i did. based on what i'm hearing now, it seems that the previous increases have been driven by utilization. this year's increase seems to be driven by a decrease in revenue and an increase in expenses for kaiser permanente, so that actually leaves me a little bit disturbed, for lack of a better description. >> vice-president of strategic accounts for kaiser permanente, and mike, you can, of course, add to this, but this is in -- it's utilization in comparison to the rest of our health plan, and so utilization did go down for the health plan, and we compare that to the utilization and what happens with the utilization for hss. what's important to understand, and mike was referencing some of this, is within the integrated

delivery system, not everything is captured. so not all of the costs are going to always be captured in that exact utilization, and that was compounded in a year of pandemic, and many expenses not being connected directly back to a specific group. so you know, you see on your screen right now the financial information that we have for our organization. our overall expenses for all of our groups actually went up, but we still rated exactly the way we were able to keep our average commercial rate increase exactly the same. and we're able to come into 2022 with a very low average commercial rate increase. keeping the same methodology that we've used in the past, where we actually compare the utilizations that your group has compared to the rest of the utilization of the health plan. and so it's a comparison each year. every group is -- that's fully credible is rated exactly the same way, and that's how we

account for that. and, mike, i don't know if you want to go back to any of the other slides or have anything to add to that. >> thank you, yeah. we looked at sfhss specific plan utilization for the 2020 plan year as was reviewed in april with the board. apologize for my barking dog in the background. and through utilization suppressed primarily in march through june. what is being projected here for 2022 is an expectation that that utilization will resume at more like pre-pandemic levels, you know, for instance, similar to what may have transpired in 2019. >> commissioner, you're on mute.

>> i'll try that again. so if i can make one comment, maybe -- when i looked at member co-pays for visits that several health plans have started to initiate co-pays for telemedicine encounters, and many times they are at the same level as an office visit co-pay, and to my knowledge, at least from what i can see from the presentations that we've had from kaiser is there have not been co-pays associated with the telephone or telemedicine encounters, and that has, you know, had some impact on revenue. just that you're not collecting the member co-pays at the point of service, increasing or at least maintaining a certain amount of level of service through telemedicine, and so that may be affecting some of this as well. and i applaud the trend not to

add co-pays to telemedicine visits, which can add up quickly, you know, from visit to visit in this setting. >> yeah, and thank you for that comment, and i know we've talked in previous meetings about the incredible increase in virtual care, and you're absolutely correct. there is no cost for any of the video or the televisits that members participate in. and likewise being the integrated delivery system that we are, there are many times during the pandemic that somebody would call in. they would be transferred immediately over to a physician and they would have a consult with the physician, and it's not necessarily all brought back to the utilization of the group. so there's a number of things at play with the expenses during a pandemic year, which is, you know, obviously nothing like any of us have ever seen. but you're absolutely correct, that there is no cost sharing at all for members with the virtual

visits. >> abbie, did you want to say something or entertain comments or -- >> no, kate just covered it. it's fine, thank you. >> okay. so i'd like to -- any other question or comments from board members? if not, i'll entertain a motion at this point. >> i move that we accept the staff recommendation as presented on the kaiser permanente non-medicare hmo 2022 weightings and as presented. >> i'll second that. this is commissioner zvanski. >> thank you. it's been moved and seconded that we accept the staff recommendations for the 4.96% premium increase in 2022 and the corresponding rate cards as outlined. i'd like to go ahead and open this up for public comment. >> president, i will pull up the

slide for comments. [reading slide] we will take a

45-second pause to allow the system to catch up and allow callers to dial in. our 45-second pause begins now.

the 45-second pause as ended. our moderator will notify us of callers in the queue. >> board secretary, we have three callers on the phone line. zero callers have specifically entered the public comment queue at this time. a reminder to all callers on the line, you must dial *3 now if you want to join public comment for this specific agenda item. we will wait five more seconds and then close public comment for this agenda item. board secretary, there is still no callers in the public comment queue at this time. >> thank you, moderator. hearing no further callers, public comment is now closed.

>> thank you very much. it has been moved and seconded that we approve the staff recommendations regarding the kaiser non-medicare hmo 2022 rating increase as well as the corresponding rate cards. all those in favor please signify by saying aye. >> aye. >> aye. >> aye. >> any opposition? thank you. it carries unanimously. we can go to agenda item no. 15. >> review and approve active employee 2022 dental rates for self-funded dental p.p.o. plans, fully insured delta care u.s.a. and fully insured -- this is an action item. >> mike clarke again. i will share my last presentation for today.

presenting the active employees dental plan rate recommendations for 2022, including the self-funded delta dental -- ppl and the two fully insured plans, the hmo and the united health care dental hmo. you will see here on the chart the active p.p.o. is self-funded, unlike the retiree plan, which was presented last month as fully insured, and the hmos are fully insured. this is a reminder of who receives coverage for the sfhss dental employee plans. the active employees of these employers, the city and county of san francisco, superior court

and municipal executive employees have access to the dental coverage throughout the hss. we will not be presenting on employee contributions today, just the total rates, as the employee contributions are set by m.o.u. for the ccsfmea and mtamea employees as you see here on the screen. there are no contributions required for either of the two dental h.m.o.s and superior court and -- employees pay no contributions for any of the three available plans. the san francisco unified school district employees and the city college of san francisco employees do not elect to offer dental coverage for their active employees throughout the hss. they offer it through other mechanisms. the summary of the rate change recommendations, along with the -- accounts are shown blow

for the active employee dental p.p.o. you'll see a large decrease in the premium rates generated primarily by the high level of dental stabilization funds that were generated by 2020 experience and applied in 2022 ratings, and then the insured rate actions for each of the two dental h.m.o. plans, which i'll discuss in a bit. and so that leads to these rates, premium rates on a monthly basis, for 2022 that are recommended in comparison to the 2021 rates for each of these plans. so the recommendations i'll review briefly are no change administrative fees and a 14.4% decrease in the self-funded total cost rates for the delta dental active employee p.p.o. no change in insured rates for the delta care u.s.a. h.m.o. and a 10% decrease in the insured rates for the united health care h.m.o. again, the 14.4% decrease is almost entirely based on the

fact that a large stabilization balance developed in 2020 due to the large degree of claims suppression that incurred in the self-funded dental plans, and those details will review with the board at the march health service board meeting. that's resulting in a approval for two thirds of the existing rate stabilization reserve balance to be applied in 2022 rating, $12,229,000. just to note, this is a result of the suppression generated in 2020, but we would expect in 2023 the amount of buy-down will be sustainable less than 12 million, so we would expect a total rate increase to be likely next year when i present to you on this plan for the 2023 plan year. the administrative fee was up for renewal, so a two-year

renewal was presented by delta dental for the administrative fee for the p.p.o. plan at no change in the $4.62 per employee per month fee that's existed each of the past three years. and so you see the tremendous impact of the claims stabilization buy-down on the total premium rate that result in the recommended total rate action of -14.4%. for the delta dental h.m.o. and the united health care h.m.o., the rates are essentially as quoted by each of the plans. delta care was proposed for a two-year rate agreement, so proposed that the 2022 rates will also apply in 2023. we're asking for your approval for 2022 today, and then for the u.h.c. dement h.m.o., a -- rates

was presented by united health care. so with that today's recommendations are shown on this page to approve the rate and administrative fee actions for the delta dental active employee p.p.o., the h.m.o. and the united health care insured h.m.o. as presented on this page. president? >> thank you very much for, again, a very detailed presentation and analysis and recommendations. so i'll open it up for questions and discussion from board members. commissioner breslin? >> thank you. do we know how many of the active members are in categories of p.p.o. premier or -- off the top of your head? do you know that? >> i don't have that off the top of my head. however, that is contained in the march experience

presentation for the delta dental active employee p.p.o., so i would recommend review of the march materials with that information. >> okay. now is there a delta dental person here? delta dental person present, representative? >> yes, hi. national account manager with delta dental. >> okay, last week i -- last meeting i asked a question are all delta dentists eligible to go into the premier status, including new dentists, and i was told yes. but i've been told by a couple dentists that that is not allowed. so is it, in fact, allowed? >> yes. so the response for our general dentists, the provider would need to contract with both the p.p.o. and premier contracts, and claims would be paid accordingly based on the member's plan type.

and then for specialists, there actually is -- it's kind of twofold. you know, periodo nottists, oral surgeons, theth considered premier in our system, but the accepted fees for the claims would be based off the premier fee schedule, so the higher schedule, and any other specialty the provider would need to contract with both the p.p.o. and premier contract and claims would be paid accordingly. >> okay, so i would like that in writing, that the dentists are able to go into the option of the premier plan so that i can show this to these dentists, because it's a big issue. i mean, if that is actually happening, that would mean you're trying to eliminate the premiers option. so i would like to see that in

writing as soon as possible. >> i would ask that -- on that point, commissioner breslin, that we get a clarification from either abbie or -- because that looks like you're stepping into the contracting realm there, and i would strongly ask for some advice before that information is provided. >> well, somebody should be able to provide it. >> no, i understand. but i'm saying that they should be able to provide it, but to whom is the question. is the counsel on? eric, are you there? >> he had to step out. >> or abbie? >> yes, i'm here, and he did have to step off the call for a minute, and i will confer with him. we are working on a number of educational issues with dental -- regarding dental coverage. but yeah, i'm a little hesitant to commit at this point that we

would provide direct communication to providers who are contracted through delta. but i get your point, so it's not lost. so let me take that back as the consideration of how we can help delta deliver the message to their dentists, because there does seem to be some misinformation out there. >> absolutely, and one person saying one and the other is saying something else, and we need to know what is the truth. >> right, and i -- and i think that -- >> dentists and delta, we can't negotiate those things with the dentists directly. >> as president of the board, if i could just step in and say that this is a rates benefits discussion at this point. these are incredibly valid points, commissioner breslin, that you bring up, and your response, commissioner scott, is equally valid. i'm not sure that it belongs in the rates and benefits discussion.

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